Key Performance Indicators for SAAS companies by Pat Lynch
KPI’s for SAAS companiesKey Business Performance Indicators by Pat Lynch
Committed Monthly Recurring RevenueTrack number of signed contracts each month and have signed contracts on fileTrack number of customers each monthTrack average value of a customer each monthNote: 90% plus is good
PipelineTrack the expected value of each potential client by the probability of getting that clientTrack this number by sales person and regionNote: Overall number needs to be increasing
Customer Acquisition CostTrack total cost of sales and marketing expenses each monthDivide the above $ amount by the number of deals closed to get cost per new clientNote: You need to get a customer on board within 1 year
Cash FlowHave monthly Cash flow documentReview the cash flow weeklyShow all customers by month in the cash flowNote: You need to have adequate cash on hand at all times and any shortages need to be highlighted
Churn RateMeasure the number of customers that do not renew their subscription each monthNote: Do exit interview with customers that do not renew. You will be amazed as to what you will learn
Lifetime value of a CustomerMeasure the average value per customer by the average lifetime per customer less the average cost to serve this customerNote: This becomes important when you are selling your business because you are not selling 1 years revenue but multiple years.
PatLynch who lives in Cork, Ireland uses these slides to present to interested groups wanting to understand KPI’s in SAAS space. Pat can be contacted at firstname.lastname@example.org or by phone +353872416668 Check my linkedin profile or web site www.stockmarkettraining.com
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